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Hurricane Season in Florida is June 1 to November 30

You might think that weather hazards and title insurance are mutually exclusive however what happens outside your home can have an impact on your ability to buy, sell or refinance property and closings can be delayed. You can take steps during hurricane season to minimize the impact a storm can have on your ability to close on-time. As soon as we receive notification about any interruption in our service, we will proactively contact our customers and Realtors® using combination of email, phone calls and automated messages to keep you up-to-date on our operations.

BE SURE TO OBTAIN YOUR HOMEOWNERS INSURANCE BEFORE HURRICANE SEASON

Don’t get stuck in “The Box” refers to the “Hurricane Box.” From the beginning of Hurricane Season, June 1st, through the end of Hurricane Season, November 30th, it will be difficult, if not impossible, to buy certain insurance coverage for the peril of Windstorm or Hurricane damage (as well as other insurance coverage). If a named Tropical Storm or Hurricane enters an approximately 16,000 sq. mile box extending over Florida and the adjacent states and well into the Atlantic Ocean, then the insurance companies will suspend binding coverage. This occurrence is also referred to as “The Storm is in the Box.”

Each insurance company may have their own definition of “The Box.” One thing is for sure, if you live in Florida or you are about to buy a house during Hurricane Season, you are inside “The Box.”

Note: The restriction also applies when a tropical storm or hurricane watch or warning has been issued by the National Hurricane Center.

Action Steps to Avoid the “Hurricane” Box:

If you are purchasing a new home or revising your existing Homeowners Insurance, then it is essential to avoid “The Box.” Simply put, insurance companies do not want to extend homeowners insurance to you immediately before a hurricane (and expose themselves to the risk of loss due to hurricane damage). The rules are fairly technical and we suggest that you discuss the exact details with your property and casualty insurance agent before you attempt a real estate closing in “The Box.”

The Closing Agent has a “Business Continuity Plan” to address concerns before, during and after the storm. We have multiple offices and a redundant back-up operations center outside of Florida. Our website, social media, phone greeting, on hold recording, and emails will alert you to any changes in our business processes that could impact you and your transaction.

If you don’t have your own personal Hurricane Preparedness Plan in place. please check out this emergency preparedness website from the National Hurricane Center for assistance.

Hurricane Preparedness

Updates to our operations will be sent to you via. text message through the TCA Emergency Text system. Please be sure to have your phone charged at all times over the next several days. DOWNLOAD HIPCHAT FROM THE APP STORE FOR YOUR DEVICE – IF WE LOSE VOICE TELEPHONE SERVICES AND STILL HAVE DATA SERVICE WE CAN SLACK TO COMMUNICATE INTERNALLY. You can access your email remotely at https://remote.theclosingagent.com Last updated 8/28/2019 0800

Beginning late last week and continuing today, our office has fielded inquiries regarding potential problems arising in connection with Hurricane Irma and existing homes currently under contract. Below, please find common questions we have received and answers to such questions. Please contact Barry Miller Law at 407-423-1700 or email Info@BarryMillerLaw.comif you have any questions concerning Irma’s impact on existing transactions.

Q: DOES A BUYER HAVE A RIGHT TO REINSPECT THE PROPERTY?

Unfortunately, the Buyer does not maintain any right to reinspect the Property after Hurricane Irma under the FR/BAR after the initial inspection period has expired. However, pursuant to Paragraph 11, “Property Maintenance,” the Seller shall has an obligation to maintain the Property, including, but not limited to, the lawn, shrubbery, and pool in the condition existing as of the effective date (“AS IS Maintenance Requirement”). Therefore, the Seller must keep the property in the same condition existing as of the Effective Date.The Buyer can also perform a walkthrough on the day prior to Closing. Pursuant to Paragraph 12(b), Buyer may perform a walkthrough inspection of the Property…and to verify that Seller has maintained the Property as required by Paragraph 11, as aforementioned.

Q: RISK OF LOSS AND SELLERS DUTY TO REPAIR. IF THE PROPERTY IS DAMAGED, IS THE BUYER REQUIRED TO CLOSE?

FR/BAR Standard M: If the cost of restoration (including pruning or removing damaged trees) does not exceed 1.5% of the Purchase Price, the Seller is obligated to repair the damage and proceed to closing. In the event the restoration is not completed prior to closing, 125% of the estimate is to be escrowed.

Foreseeable Issue: Who determines what “estimate” to follow for purposes of this term? The FR/BAR Contract is silent as to this terms definition; therefore, we recommend that the parties attempt to procure at least two estimates for the restoration of any damage.

Note:Seller’s sole obligation with respect to tree damage by casualty or other natural occurrence shall be the cost of pruning or removal.

Q: WHAT IF THE BUYER STILL WANTS TO CLOSE, EVEN THOUGH THE DAMAGE EXCEEDS 1.5% OF THE PURCHASE PRICE?

In the event the damage to the Property exceeds 1.5% of the Purchase Price, the Parties may proceed to closing if they agree. In the event the cumulative damage exceeds 1.5% of the Purchase Price, it is advised that the Seller submit a claim to their homeowner’s insurance policy and assign the insurance claim to the Buyer. If the Parties wish to proceed this route, Barry Miller Law can prepare the Seller’s assignment of the insurance claim to the Buyer for a flat fee starting at $495.00.

Q: DOES FORCE MAJEURE ALLOW FOR THE INSPECTION TO BE DELAYED?

Force Majeure is governed by Standard G of the Contract. Force Majeure means: hurricanes, floods, extreme weather, or other acts of God…which by exercise of reasonable, diligent effort, the nonperforming party is unable in whole or in part to prevent or overcome. If it’s determined that Force Majeure applies, the Parties shall not be required to perform any obligation under the Contract so long as performance or non-performance or the availability of services or required approvals essential to Closing cannot reasonably or diligently be procured. Under this standard, the Closing Date will be extended a reasonable time up to seven (7) days, after the Force Majeure no longer prevents performance. So, a lack of power to the Property would likely prevent performance under the Contract and would likely constitute a Force Majeure.

Q: WHAT IF THE DAMAGE IS UNDER 1.5% AND THE BUYER’S LENDER REFUSES TO CLOSE?

The answer to this question is contingent upon the language contained in the Loan Approval. However, keep in mind that under the latest version of the FR/BAR the Buyer doesn’t need to provide a copy of the Loan Approval and therefore the Seller may not know the Property related conditions contained in the Loan Approval. Due to this flaw in the Contract, agents should, in the future, include this provision:

Buyer shall provide written verification from Buyer’s mortgage broker or lender of the Loan Approval, in accordance with the terms set forth in this Contract, to Seller. If Buyer fails to obtain Loan approval within the time set forth and thereby terminates this Contract, Buyer shall provide written verification of same and the reason for such denial to Seller.

Q: WHAT IS “ESSENTIAL” FOR CLOSING?

Under Paragraph 5(b), Closing will be extended if Force Majeure causes “services essential for Closing to be unavailable.” Services essential for Closing is not defined in the Contract; however, the Contract does state that availability of utilities is essential.

Q: WHAT IF THE BUYER REQUESTS TO EXTEND THE INSPECTION PERIOD UNDER FORCE MAJEURE?

If the services necessary to perform the inspection are able to be procured by the Buyer through reasonable, diligent efforts, (i.e. inspector), there would not be any delay or extension of the Inspection Period; however, if there’s no power to the Property and the Inspection Period has not expired prior to the Force Majeure, the Inspection Period could be extended for a reasonable time not exceeding seven (7) days.

Q: WHAT NEEDS TO BE IN WRITING?

Please remember that anything agreed to must be in writing and signed by both parties. Agents must remain mindful and be cautious that they do not draft legal terms and conditions which may constitute the unauthorized practice of law (UPL).

Our Attorneys are available to assist agents, Buyers and Sellers with questions and drafting need Addendums.

All references contained herein are to the 2017 FR/BAR “AS IS” Residential Contract for Sale and Purchase.